Your estate plan can include trusts that allow you to pass assets from your ownership into the ownership of your named beneficiary. There are some situations where you need careful planning to protect your heir’s future, though. That is where a special needs trust can help.
Work with our Arlington Heights special needs trust attorney from Plan Forward Legal to determine whether this estate plan component is appropriate for your situation. We will examine the types and flexibility these tools can provide to you. Our founder, Victoria Lozano, is a trusted Arlington Heights estate planning attorney who is ready to work with you to build a special needs trust.
How a Special Needs Trust Works
A special needs trust is a legal arrangement that allows assets to be held and managed for a person with a disability who cannot manage them independently. The person with the disability is the beneficiary. You can create a special needs trust for various assets, such as to leave money available for:
- Special medical needs or treatments not covered by insurance
- Educational goals and objectives
- Travel costs
- Recreation and other desired needs
- Therapy, including alternative forms of therapy
What makes a special needs trust different is that it protects your beneficiary’s ability to maintain access to government benefits. Your beneficiary may still receive benefits from Supplemental Security Income (SSI) and Medicaid. Without this type of trust, those assets may disqualify the beneficiary from receiving government support.
The Types of Special Needs Trusts Available
Our special needs trust attorney in Arlington Heights will discuss when this type of trust is applicable and then which of the three recognized forms under Illinois law apply to your situation. When setting up a special needs trust, you must carefully consider the nuances of each trust type to ensure you select the most appropriate level of protection.
- First-party special needs trusts: Under the federal law in 42 U.S.C. § 1396p(d)(4)(A), a first-party trust protects eligibility for benefits, including Medicaid. The funds come from the beneficiary’s own money. That could come from an inheritance or a personal injury settlement. There is a payback provision here. That means the remaining funds after death repay the government for previously paid Medicaid costs.
- Third-party special needs trusts: These trusts provide supplemental needs coverage without affecting the beneficiary’s benefits. They are commonly used in estate planning. Grandparents, parents, or other relatives can fund them using their assets. There’s no Medicaid payback involved here. Instead, the grantor of the trust names what happens to the remaining assets after the beneficiary’s death.
- Pooled special needs trusts: Funds from multiple parties are pooled in a trust, making it beneficial for individuals with smaller amounts of money or no family to set up a trust. A non-profit organization will manage the funds in separate accounts. Some pooled trusts have a payback provision while others do not.
In all situations, work with our Arlington Heights special needs trust lawyer to set up and manage these trusts. We can customize various features to ensure they align with your goals and objectives. Most people setting up these trust funds do so to care for their loved one without jeopardizing their Medicaid or SSI benefits.
Why Work with a Special Needs Trust Attorney to Establish Them
By working with a special needs trust lawyer in Arlington Heights, you can create a trust that fits your objectives. These trusts must follow state and federal laws to work in the way you expect, and if they do not, you could face complications later, including the inaccessibility of your funds when your loved one needs them the most. When setting up a special needs trust, we will handle several steps for you:
- Determine if your beneficiary qualifies. These trusts are typically available to those who have a physical or mental disability that Medicaid recognizes. There is a great deal of leeway in this process, though.
- Help you determine the trust’s requirements. This may include who the trustee will be and what rules about fund use you wish to establish. We can explore strategies to help ensure your wishes are fulfilled.
- Aid you in minimizing Medicaid risks. The most important factor to consider when setting up a special needs trust is ensuring it does not jeopardize Medicaid or SSI benefits.
Schedule time to speak with our special needs trust lawyer in Arlington Heights at Plan Forward Legal to review the trust types that may apply to your situation. We will work with you to make sure you understand the opportunities and limitations of these trusts.
When to Turn to a Special Needs Trust Attorney Near Me
If you are unsure whether a special needs trust may work for your family member or another party, schedule time to speak with our legal team. Each situation is a bit different. Some of the most common times to use them include:
- To leave an inheritance to a beneficiary who receives government benefits
- To protect assets from a settlement that would disqualify someone for benefits
- To improve the quality of life of the beneficiary by providing access to personal items, activities, travel, or other costs not covered through government funding programs
- To safeguard the beneficiary’s future
Our Arlington Heights special needs trust lawyer will go over your situation to devise a plan to meet your goals. Keep in mind that not all situations warrant this type of trust, but there are strategies available to honor most of your wishes.
How to Get Started with a Special Needs Trust Lawyer Near Me
Schedule time to speak to our Arlington Heights special needs trust attorney at Plan Forward Legal today. When you do, we can discuss any specific estate planning concerns you have, various types of trusts, and the beneficiaries you hope to name. We can quickly establish a special needs trust to begin protecting your beneficiary’s life now and well into the future. Contact us now to learn more about special needs trusts.